Escherichia coli strains have been isolated that produce hybrid proteins comprised of an NH2-terminal sequence from the lamB gene product (an outer membrane protein) and a major portion of the COOH-terminal sequence of beta-galactosidase (beta-D-galactoside galactohydrolase, EC 3.2.1.23; a cytoplasmic protein). These proteins exhibit beta-galactosidase activity. One such strain, pop 3105, produces a hybrid protein containing very little of the lamB gene protein; the protein is found in the cytoplasm. The protein found in a second strain, pop 3186, contains much more of the lamB gene protein; a substantial fraction of the beta-galactosidase activity is found in the outer membrane, probably facing outward. These results indicate that information necessary to direct the lamB gene product to its outer membrane location is located within the lamB gene itself. The properties of such fusion strains open up the prospect of a precise genetic analysis of the genetic components involved in protein transport.